By Harguan Kaur
February, the dreaded month of roses, chocolates and cards. If you’re anything like me, (a cynical romantic) this time of the year can be eye-rolling and tortuous, due to irrational purchases of roses and chocolates.
February is a clear description of an economic concept called behavioral economics. Behavioral economics, loosely defined as ‘the field of understanding why people do things financially that may be irrational.’ How is purchasing countless roses and chocolates deemed irrational? Well…
According to trading broker Ozios, due to rampant inflation, brands such as Mondelēz, Nestlé and Lindt have increased their prices for chocolate by around 11% or more. This means that buying chocolates may burn through your pockets a bit more than usual. In addition, flower prices have also skyrocketed! Not just the usual, pre-valentines day price increase but also due to increased climate disasters impacting supplies.
So while we remain in a ‘cost of living’ crisis, why are people choosing to spend money on Valentine’s Day? Well it’s something the economist in me couldn’t tell you. For there is little economic benefit from the purchase of roses and chocolates and cards. And as we’ve explored before, increased expenditure can create an upward pressure on inflation. The hopeless romantic in me might just believe that it is all for love, but I guess we will never know!
